저자: Kevin · 외국인
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다듬은 글
yesterday we discussed that the economy is facing a stagnation and at the same time we have already discussed that China is likely going into a depression this is leading some of the comments to rightfully question my belief that our stock market will face a quote volatile Nike Swoosh recovery let's break this down and explain how our investments could be affected in my opinion based on the fact that yes we could actually be facing economic stagnation quick update I am on well now I am on autopilot on my way to a destination I have to go fly somewhere uh so we're gonna fly and uh so we'll be on autopilot and we'll do this discussion okay so let's keep this very clean yesterday we made it clear that employment placement firms or suffering their earnings are going down less white-collar workers are being hired we are seeing more labor attrition which is different from laying off people but it's basically not hiring people who have otherwise left and we are seeing a Slowdown in consumer staples and consumer discretionaries across the board so in other words things people need to buy they're buying a lot of stuff things people want to buy they're buying less stuff this is corroborated at small and medium businesses and across all income thresholds this is evidenced by American Express Capital One Target Home Depot Etsy the list goes on we know the stagnation is happening and at the same time we know China is probably in a depression after all if we rely on maybe 10 to 15 percent of our GDP on is basically relying on China then is is that not a possible way that we could fall into a recession and the answer is absolutely 110 yes both of these remember American consumers make up 72 percent of the economy China contributes to our economy as well after all if they buy electrical Machinery which is one of the big things that they actually import from us if they buy high-end Machinery from us Machinery that isn't banned well that contributes to our domestic product our gross domestic product what we produce both of these things can absolutely contribute to stagnation which is basically flat growth or a recession which could be a shallow recession it could be a negative point one percent for two quarters in a row which is basically roughly what we had in the beginning of 2022 which leads a lot of people to say the recession is already behind us but then the yield curve is still inverted so everything's a little contorted question it people were asking Kevin the most important thing I care about is not are we going to go on a recession or not it's how can you possibly say we're still going to be in a volatile Nike Swoosh recovery I'm going to make that answer exceptionally clear now the stock market does not give a flying hoot what is happening to today you do I do as individuals as humans we care about what is happening today but the stock market has a bizarre way of looking ahead 18 months this is why when in May and towards the middle of April of 2020 after we got destroyed towards the end of February in all of March and a little bit of the beginning of April with covet lockdowns and shut the economy and Bill Ackman lock everything down for 30 days and and we knew we were going to be dealing with a massive nightmare of the economy this is why we started seeing pain immediately but it's also why by mid-april we realized wait a minute we're gonna reopen everything's gonna go back to normal everything's gonna be glorious and great maybe there won't be other future waves of covid and the stock market very quickly rebounded While most of our country was still in lockdown and thousands of people were dying to the first strain of covid which was substantially more virulent than it is today in many regards okay great so we know that works what else did the stock market do the stock market started selling off in December of 2021 but inflation didn't Peak until seven to eight months later because the stock market price is in the pain that is to come for the next 18 months well that pain might already be priced in all the way into December of 2022 which is why we've started having a recovery my thesis has been the economy we'll see inflation Trend down it will come down in volatile reports it'll lead to a lot of fear in the economy and we'll have a lot of ups and downs in the stock market but we will generally Trend up as people realize we have a big opportunity cost in sitting in cash and in bonds and maybe it's time to be allocated to stocks again and that's exactly what we saw in 2023 so we have to remember number one stock market is forward-looking number two when we consider the forward-looking nature of the stock market the little nonsense that we hear on the daily basis like uh this morning we had uh uh I think it was Bullard or barking one of them over at the Federal Reserve well you know if the economy is doing stronger and inflation Trends up we might have to raise rates higher all people hear from that is if the economy is stronger we have to raise rates that's not the what he said what the FED is saying is if the economy is stronger and inflation is up we then may have to raise rates more but we can have a strong economy with falling inflation we can recover after what we saw with Paul volcker in 82 over the next 20 years with declining inflation and an overall strong economy with short periods of pain like in 87 in the SNL crisis and some of the other issues towards the late 80s but broadly out of that 20-year period you had pretty much 17 great years you can have a strong stock market in the face of pain for the consumer it's weird now we have to go into the segments though what do I personally believe will do the best I want to be crystal clear about this I do not think every single stock is going to do well I I despised the fact that Macy's did well during the pandemic because I thought this was a company trending towards being Sears and going bankrupt and I still believe that yes they've got a fantastic real estate portfolio but what good does that do you in commercial real estate today so companies like these consumer goods and clothing and apparel companies and even some of the beauty companies that have done really well they've somewhat blown my mind okay they've done very well because I do think a weakening consumer is going to stagnate to lead to probably massively negative year-over-year earnings for these companies Consumer Staples I think will suffer I've been saying that since December and some of these consumer discretionaries that have really been propped up by covid like the Macy's or even Beauty to that some extent I think had their run I think now where the money is and what can actually support the stock market even in the face of these stocks declining is going where the spending is sorry I'm moving some coffee mugs that's the don't sue me bro coffee mugs anyway going where the spending is where is the spending in the economy today it's simple the spending hands down is at the biggest companies in America Amazon Google Facebook a Tesla this kind of spending the spending that we have to build new chip factories by TSM by Intel the uh from via the chips act the spending that we're getting uh contributing to energy subsidies whether it is solar production or encouraging people to buy solar or to buy batteries or manufacturing of batteries in America these are things that can actually keep us out of a recession so as parts of the economy suffer Freight and some of the consumer discretionaries are Staples other economies can flourish that's sort of a little bit of a yin and yang yet you would expect in normal economy anyway everything goes through different waves but here's the other thing that's wild home building is exploding home building is a large part of our GDP estimate in America business fixed investment where I should say let me rephrase that not business fixed investment residential fixed investment is expected to balloon in the first quarter of 2024 thanks to home builders realizing oh well okay prices hit their bottom they're starting to Trend up again there are very few buyers but price is starting to Trend up again so we can still make profit on homes by building them and then selling them let's go build but when we get that kind of investment we hope that GDP can actually remain strong for the first half of 2024 and it does seem unlikely that we're going to hit a recession towards the end of 2023 so there is a possibility that we will avoid a recession the inverted yield curve says we will not avoid a recession but even if we go into a recession remember the stock market is looking Way Beyond the stock market is already beyond the 2024 election think about that the stock market is already starting to price in 2025.
and I think that's what folks have a hard time comprehending in the stock market and it's okay because it feels weird here we are just past the middle of 2023 there are definitely still problems in the economy and there's definitely still recession risk over the next 18 months and the stock market is already looking past it because most of the market does not believe that we are going to have a high inflation problem for long the real debate is actually okay well our rates just going to stay higher for longer through 2025 are they ever going to go back to zero percent okay but that doesn't mean you have to go back to December of 2020 to lows or July of 2022 lows does that potentially limit how high the stock market can go absolutely if we went back to zero interest rates the NASDAQ would be 20 to 30 percent higher just solely based on inflation than where it was in November of 2021 I strongly believe that we'd be 20 to 30 percent higher than where we were in November of 2021 simply inflation adjusting the stock market if we went back to zurp but the market isn't necessarily pressing in zurping oh I pulled too far away oh I got it uh I think the market is probably pricing in a return to somewhere around two percent two and a half percent interest rates by uh 2025 middle of 2025 not necessarily back to zero and if we go back to zero be even better so this is why I'm doing my best to align my portfolio with uh companies that I believe have Enterprise uh pricing power and higher end uh consumer products that people are going to want to buy no matter what happens uh in the economy uh and so that I find is very interesting so I don't I don't have the perfect answers to that but I do believe there's a strong case to be made for the cloud service providers the Googles the Amazons the Facebook I've been very impressed with meta's numbers I I admit I have never been very excited about them but I've been pretty impressed with them and uh as far as uh obviously Nvidia the chip makers the chip stack uh very excited about those so I think that's the balance balance that out with solar thanks so much I gotta go appreciate y'all I'm gonna upload this video now we'll see you soon oh and look we got 69 for PP on the plane now which finally matches it finally matches
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